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E-Commerce Law Week, Issue 737

December 29, 2012

Punishing Hackers Even When They Do No Damage

The U.S. District Court for the Northern District of Illinois has held, in Chadha v. Chopra, that a party suing under the Stored Communications Act (SCA) can recover punitive damages and attorneys’ fees without having to prove actual damages. The court noted that federal courts are split over whether a party must prove actual damages in order to recover statutory damages under the SCA.  However, the court held that the statutory language also provides for recovery of punitive damages, and does not require proof of actual damages as a prerequisite to an award of punitive damages and attorneys’ fees.  This will make it easier for victims to use civil suits to go after hackers.

Stored Communications Act Does Not Protect Information Stored On Cell Phone

The Fifth Circuit has held, in Garcia v. City of Laredo, that information stored on and accessed from a cell phone is not covered by the SCA.  Accordingly, an employer who accessed the contents of plaintiff’s cell phone without authorization did not violate the statute.  This is the latest in a string of decisions that declined to extend SCA protection to personal computers and cell phones, and limited it to data stored by an electronic communications service provider.

Court Upholds FCC’s Data Roaming Rule

The D.C. Circuit has held, in Cellco Partnership v. Federal Communications Commission, that the FCC can require wireless carriers to allow data roaming on their network by customers of other carriers, as long as it is based on commercially reasonable terms.  The court found that the FCC has the authority to promulgate the Second Report and Order In the Matter of Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of Mobile Data Services under the Communications Act of 1934, and that its promulgation does not improperly impose common carrier obligations on mobile data providers.  The court's holding is an important victory for the FCC, and for smaller mobile providers, as it confirms the Commission’s authority to regulate both voice and data wireless services while giving it the flexibility to treat voice and data differently.

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